ECON 301 Exam 2025 Questions and
Answers
Which of the following appears in the current account part of the balance of
payments? - --CORRECT ANSWER--income earned by Barclay's Bank of London
England from subsidiaries in the United States
What is the exchange rate between dollars and Swiss francs if one dollar is
convertible into
one 1/15 ounce of gold and one Swiss franc is convertible into 1/10 ounce of
gold? - --CORRECT ANSWER--FrSwiss 0.67 = $1.00
An unsterilized intervention in which domestic currency is sold to purchase foreign
assets leads to a - --CORRECT ANSWER--gain of international reserves and a
depreciation of the domestic currency.
A sterilized intervention in which domestic currency is sold to purchase foreign
assets leads to a - --CORRECT ANSWER--gain of international reserves and
almost no change in the exchange rate.
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, What will happen to Chinese holdings of the U.S. treasuries if Chinese authorities
decide to let the yuan float freely as of today? - --CORRECT ANSWER--Chinese
holdings of U.S. treasuries will remain unchanged at the current level
Calculate the overvaluation of the Thai baht (THB) if you can get 34.6 THB per
USD at the exchange counter, but a lunch menu that costs 25 USD in Boston sells
for 948.25 THB in Bangkok. - --CORRECT ANSWER--The Thai baht is 9.47%
overvalued.
If there is perfect capital mobility, then a sterilized exchange rate intervention
If the exchange rate
decreases belowdecreases below
the exchange rate peg, the central bank must intervene by _________ domestic
currency and __________ international reserves. - --CORRECT ANSWER--
cannot keep the exchange rate at par.
buying; selling
The official reserve transactions balance equals
If the current account balance is
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Answers
Which of the following appears in the current account part of the balance of
payments? - --CORRECT ANSWER--income earned by Barclay's Bank of London
England from subsidiaries in the United States
What is the exchange rate between dollars and Swiss francs if one dollar is
convertible into
one 1/15 ounce of gold and one Swiss franc is convertible into 1/10 ounce of
gold? - --CORRECT ANSWER--FrSwiss 0.67 = $1.00
An unsterilized intervention in which domestic currency is sold to purchase foreign
assets leads to a - --CORRECT ANSWER--gain of international reserves and a
depreciation of the domestic currency.
A sterilized intervention in which domestic currency is sold to purchase foreign
assets leads to a - --CORRECT ANSWER--gain of international reserves and
almost no change in the exchange rate.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, What will happen to Chinese holdings of the U.S. treasuries if Chinese authorities
decide to let the yuan float freely as of today? - --CORRECT ANSWER--Chinese
holdings of U.S. treasuries will remain unchanged at the current level
Calculate the overvaluation of the Thai baht (THB) if you can get 34.6 THB per
USD at the exchange counter, but a lunch menu that costs 25 USD in Boston sells
for 948.25 THB in Bangkok. - --CORRECT ANSWER--The Thai baht is 9.47%
overvalued.
If there is perfect capital mobility, then a sterilized exchange rate intervention
If the exchange rate
decreases belowdecreases below
the exchange rate peg, the central bank must intervene by _________ domestic
currency and __________ international reserves. - --CORRECT ANSWER--
cannot keep the exchange rate at par.
buying; selling
The official reserve transactions balance equals
If the current account balance is
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